01 Oct Does this trust have to file a separate tax return?

Q. My wife and I set up a revocable trust and put our assets — the house, IRAs, bank accounts — in the trust’s name. Does the trust have to file a tax return? We filed our own return reporting all income.
— Unsure

A. Many people decide to use trusts as part of their estate plans.

There are big differences between revocable trusts, which you said you have, and an irrevocable trust.

Because yours is a revocable trust, you have the right to control every aspect of the trust, including terminating it, said Michael Karu, a certified public accountant with Levine, Jacobs & Co. in Livingston.

“The trust is deemed to be a disregarded entity and does not have to file a separate return,” Karu said. “The way you did it is correct as all income gets reported on your personal income tax return.”

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This story was originally published in October 2024.

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